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It is not uncommon for small businesses with limited resources to be challenged at the thought of facing their bank manager to apply for business funding. The reason is simple; regardless of how long you have been with your bank, you will still have to comply with formalities when it comes to funding your business start-up or business growth. Fundamentally, you will be asked to write a business plan for funding which must be presented with your application form. You may wonder why you need to present a business plan to lenders or investors. Let’s think about why banks want you to prepare a business plan and then you will fully understand why investors ask for this precious document that will cost you some time and money to put together, but ultimately, if done well, will help you raise the much needed finance.

Some Reasons Why Banks Need A Business Plan

1. Banks are taking a risk on you and your business and they need to understand that risk and compare it against the expected reward from your business. Have you ever thought about how banks make their money for their shareholders? Well, they do so investing their capital (money – usually investors’ funds and borrowed funds) in your business with full expectations of earning higher returns than the costs they must pay for borrowing or raising their own capital. If you fail to deliver the returns on their investment from your business, they will end up being a victim of your problems which will cost them their business. In short, your risk of business failure becomes their risk too.

2. They want to gain a better understanding of your management team who will be responsible for managing the funds invested in your business. This is a concept many small businesses and start-ups, don’t grasp fully. They may think their business ideas or wonderful products are sufficient ingredients for business success. Nothing can be further from the truth. A business is an organisation of integrated functional activities designed to accomplish a desired objective. These integrated activities must be managed competently by different people inside or outside the organisation for successful results to be accomplished. The bank manager reviewing your application must be satisfied that your team possesses competencies both at the level of technical knowledge and correct attitude – the critical ingredients for success when present and vice versa. A business that is poorly managed will fail irrespective of the quality of its products and benefits offered to its target market. With this in mind, you must be aware that when you apply for funding from a bank (or any other types of funders), your management team’s quality will have to be judged based on past performance. They also want to know if your management team possesses industry, business and market knowledge. Of course, if you are a one man business, you need to ensure you put in place a team, virtual or physical that brings the balance of expertise critical to give assurance to the bank that your business will not expose them to unmeasured risks.

4. They want absolute assurance that your business model is robust. That you have thought about the pros and cons of each option and have a viable business proposition that is not devoid of reality. This will be tested with questions in areas where gaps are detected and you will be expected to give answers that are credible to ensure their funds are not exposed. Banks want to see positive returns on their investment in your business, they won’t make any compromise for your own short-comings and the sooner you address the weaknesses in your business plan the faster you will be able to raise funding for your business.

Taken together, irrespective of whom you wish to raise funding from, if you want to successfully fund for your business as a start-up or an existing business seeking growth, you must address all the four areas mentioned above in your business plan. I have merely summarised some of the key points for you to bear in mind and you can find more of my articles to learn about the subject thoroughly. In my experience of writing and reviewing hundreds of business plans for funding, a clearly written concise 10-15 pages business plan is sufficient. This should include 3-4 pages of financial information and may I also caution you to stress-test your financial plan for variation in assumptions underpinning cash-flow projections to ensure you have plans to mitigate risks revealed by the tests, as the bank will do so as part of their own due diligence test. This is referred to as sensitivity analysis.

Starting a business is tough.. no exaggeration. To start and run a business is both nerve-racking, petrifying.. and a dozen other emotions. It doesn’t matter if you are drafting the initial business plan, just opened the doors, or been around for awhile. Planning will alleviate much of the risk, but not all. You can’t control everything in life, nor in business.

Want to grow your company? Here are five guidelines to help you do that. Many accomplished business owners wished that someone had told them this at the beginning.. and look at us giving them away to you.

Guidelines to Grow Your Business

1. Realize that you can’t do it all

Being your own boss is part of the appeal to start a business. The owner of a small business will have to be contented to wear many hats – that of a sales assistant, bookkeeper, marketing director. However, this does not require that he or she should do it all on his or her own. Now is a good time to consider outsourcing some pieces of your business to a virtual assistant and a bookkeeper.

You will certainly be able to do it alone for a short time and even manage to flourish, but in order for the business to develop, it can’t go on like that forever. It is crucial to know when to find capable people with the same vision. You can only do so much and if you want the business to thrive, you will have to accept that you need help.

It should not be necessary to relinquish your new found freedom or your control to get help, but you are only one individual.

2. Don’t spread your doubts

Confidence, drive and passion are needed when launching and running a prosperous business. It is, however, normal for doubts about this new undertaking to creep up on you, but essential to know to whom and where to voice these uncertainties.

Don’t tell influential people outside the company like a capitalist that might invest in your venture or the local credit union’s manager. They will only finance someone who is confident about his or her business. So keep your game face on when you approach investors for much needed money. In the same way the employees must be sure that they can believe in you. Don’t when times get tough, don’t express your emotions and doubts openly for all to hear.

It would be lying to say that not everyone have fears and uncertainties. A business owner, however, should arouse confidence in his or her employees. So think about how you act when you are with them, especially when things aren’t happening like you would like it to.

3. Work towards that business you would want

There’s an expression that says that you should fake it until you make it. You should adopt this principle, particularly in the beginning of a business venture.

Don’t intentionally deceive clients about the business’ scope or what services you can offer them. New clients should be instilled with confidence in your business, until your reputation has been established. So, run the business as if it is already the business you would want, even if it is not there yet.

Apply this concept to all aspects of your business venture – from the way potential clients are greeted to the language used on advertising materials and the company website. If a confident air is projected when new customers are dealt with, a first impression is made that will offset the small size or lack of experience.

It is not necessary to approach all dealings as the president of a worldwide organization, but think big when you want to grow your business. Make sure any material or employee who have direct contact with your clients, represent your business the way you would want to.

4. Deal with the negative answer of no

It is only you who can decide to open your own business, an adventure that you yourself decide to go on. Regrettably, to make your dream come true, you’ll have to involve other people whose opinions will have to be heard about the way things happen.

Starting out as the owner of a business you will often hear “no.” Potential customers and clients will not be interested, your idea will be passed on by investors, and your banks loan applications will be turned down. Don’t feel dejected because rejection is essentially fabulous.

How so? For the reason that every time you hear “no,” you must choose to appreciate it as a break. Maybe your bank loan application was turned down, not because of your idea but because of a problem with the business plan. Perhaps a non-interested client could force you into developing your pitch or making your offered services more convincing.

A business owner should look at rejection as inevitable, but it is your choice how to react to it.

5. The business bank account isn’t for your personal use

This is a big one, so read it again. And again. Once your business is going strong, the temptation will be there to use your business account for personal use, to borrow money from the business or treat yourself with lavish payments, but don’t do it, especially in the beginning.

Even a successful business will admit that to grow cost money. Every time you take from the business’ money, the chances of growth diminish. You should be sure to adequately compensate yourself for the work you do, but your salary must be modest and reinvesting in the business must be your main concern.

To grow a business will cost money because everything needed for growth like equipment, talent and space costs money. Therefore the smaller amount you put back, the slower the growth. The more money put back, the faster the operation can be expanded and the more profits can be made.

Many small companies in the US expect some growth opportunities in the next year. That is the great news! The bad news? Financing opportunities are looking bleak, particularly if the business owner has less than great credit, or a new business. Why would you need to know about financing small business loans? The main reasons for small business financing are to receive working capital and funds for capital expenditures.

It used to be that applying for business cash for a smaller business was fairly straightforward. You’d pay a visit to your local friendly banker and talk about your business needs. You’d discuss what you needed and they would help with financing a business loan – yours, to be exact. Then, the financial crisis hit, and banks closed ranks and decided that loans for small business were too risky. Business cash almost dried up. The big losers? Small business owners.

Now, we see the result of lack of financing: many small companies are either struggling to stay afloat, or are finding it almost impossible to capitalize on upcoming opportunities. In a recent Year-End Economic Report published by the National Small Business Association, nearly 40% of small businesses report they are unable to acquire adequate means for financing small business loans they deem necessary for their business to continue and grow.

What are the options for companies to get the business cash they need? The large corporate bankers and small locally owned banks are not the alternative they have traditionally been. You may feel that your business is a captive being held by the current economic situation and credit crisis. What you may not know is that there is a great source of alternative lenders who can provide working capital for small businesses. It is possible for loans to be secured against cash flow or your accounts receivable. In addition things such as inventory and purchase orders can be considered. Do you own property, machinery or equipment? These things as well may be leveraged to secure loans for small business.

What happens when your long time banker tells you there is no money for your business? Don’t give up and think that all is lost. There is help just around the corner for you. Business lending has changed. It may seem a little different to do business on the internet, but that is the new way. You just may be able to get the financing you need when the bankers say “No way.” Asset-based lines of credit may be the way to go in this Brave New World.

Typical banks are just no longer willing to extend traditional financing to the small company owner. There are many reasons for this, some of which are tightened federal requirements, as well as skittish investors who only look at the bottom line. These factors combine to make it seem that any loans for business may seem quite impossible. But don’t believe that! There is a whole new world of private banks and small business lenders who welcome your business. Once the level of risk of the business being financed is determined, you may be pleasantly surprised by the rates and terms you may be offered. Take advantage of the growth opportunities for your business. Grow your business just as you’ve dreamed.

For all small businesses, whether retail, service based or otherwise; day-to-day management can get hectic to say the least! From taking care of staff, to dealing with orders and other areas of daily operation, for those in charge of a small business there are simply countless areas to contend with and as a result, the financial side of a business can quite easily get neglected.

From payroll, to invoices to expenses and cost management; maintaining the financial side of any business is crucial to its success. Whatever the business, a healthy financial profile and good control is key; knowing just what is going where, what is costing the business too much and where crucial savings can be made really can make all the difference to a business. With so many other areas of a business to focus on however, it is often easy and often the safer decision to entrust finances in the hands of an accountant.

Whether you know what it takes to control the financial side of your business or are new to it all, the right accountant can make all the difference, working with you to strengthen your business all the whilst freeing up your time to focus on other areas.

Investing in an accountant could be the best decision you make for your business and the below tips are designed to help ensure that whatever the business, you get the right accountant for you…

Experience – For small businesses in particular, it is often agreed that specialist small business accountants are the best option. Although it may seem enticing to go with a large financial company you have to remember that you may just be the small fish in the big pond and easily get neglected as the least important client. For those accountants specialising in small business finance you stand a far better chance of getting a dedicated service from an expert who can understand how your business works.

Services – Whether you require all round accountancy services or a specific service; generally speaking it is often best to go with a rounded accountancy firm that knows how to deal with all areas of business finance. You may have everything under control and feel as though you only need assistance with a certain area but as a small business, it is often all too easy to require a little advice and support here and there (particularly when it is time to file a tax return) and the more your chosen accountants know; the better looked after you will be.

Trust – When it comes to your business finances, trust is everything so when searching for an accountant for your business so why not consider selling recommendations from friends and family? Whether you know someone who has a business or know someone who is an accountant themselves, it is important to go with a trusted source to ensure your businesses best interests. You could even seek recommendations from other businesses too!

A healthy financial profile can help ensure any business stay on the path to success. Whether you require bookkeeping services, payroll assistance or all round financial support, find the right accountant for your business and you’ll be surprised as to just how easy things can get!